Proposed changes per January 1, 2014

Employee related changes The amount of the tax credits (general tax credit and labour credit) will be increased as per January 1, 2014 for taxpayers earning less than Ã¢â€šÂ¬ 19.645. The tax credits will be decreased for taxpayers earning more. As per January 1, 2014 it will not be possible anymore to deposit a severance payment tax free in a so called Ã¢â‚¬Ëœstamrecht B.V.Ã¢â‚¬â„¢ or in a special bank account. This means that that redundancy/severance payment will be fully taxed in box 1. Existing 'stamrechten' do not have to be paid out in periodic annuities anymore. They can be paid out in a lump sum. No revision interest/penalties are due. In order to stimulate the liquidation of existing 'stamrechten', an extra incentive is created to encourage individuals to receive the stamrecht in a lump sum payment: only 80% of the capital will be taxable. This rule only applied if the full amount of the capital is paid out in 2014. The special option for non-residents of the Netherlands to choose to be treated as a resident of the Netherlands will be abolished as per January 1, 2015. When driving a car with foreign licence plates, while being a resident of the Netherlands, you are obliged to get a Dutch plate and may be obliged to pay BPM (luxury tax for vehicles), import duties and road taxes. The tax office will take action to detect these foreign cars and to make sure the drivers will pay these taxes. The Dutch government is taking further action to avoid fraud with allowances.

Employer related changes The so called crisis levy will be extended for one more year. This means employers will have to pay 16% levy on wages they paid out in 2013 and which exceeds the amount of Ã¢â€šÂ¬ 150.000. The mandatory application for the work relates costs (in Dutch: werkkostenregeling) is postponed by one year. This means an employer can apply the old rules still in 2014. The Dutch wage tax act is amended so the income related contribution of the employer for foreign health care insurance, that is comparable to the health care contribution under the Dutch health care act, is excluded from the employeeÃ¢â‚¬â„¢s taxable income. As a result, this can be reimbursed tax free.